NORFOLK TOWER 2211 NORFOLK STREET HOUSTON, TEXAS EXECUTIVE SUMMARY 1 Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a Texas licensed real estate broker ( HFF ).
HFF is pleased to offer for sale Norfolk Tower, an institutionally owned office building featuring 207,562 square feet of boutique office space located in Greenway, one of s top infill suburban submarkets. Norfolk Tower is 82.6% leased with 3.3 years of weighted average remaining lease term and offers a 3.26 per 1,000 square foot parking ratio in a fourstory parking garage. Since 2012, ownership invested more than $3 million in non-leasing capital, allowing investors to immediately capitalize on the remaining vacant space.
INVESTMENT HIGHLIGHTS UPSIDE POTENTIAL Norfolk Tower is favored by tenants seeking urban infill office space with excellent mobility, surrounded by an abundance of amenities. The Property s loyal tenancy consists primarily of the wealthy, well-educated workforce nearby and combines for a weighted-average tenure of 8 years at the Property. Currently 82.6% leased, investors have the rare opportunity to create significant value in the near term with rental rates that are approximately 7% below market. Moreover, Norfolk Tower houses mostly small to midsize tenants, with little exposure to any one tenant, which enables a new investor to quickly capitalize on the ability to convert these existing rates to market rates. TOP SUBURBAN SUBMARKET Due to its proximity to a well-educated work force, the Greenway submarket remains in favor with tenants and investors as occupancy averaged 90% over the past five years, outperforming other submarkets such as the CBD and the Galleria. Leasing momentum continues to be positive as the submarket absorbed 90,309 square feet over the twelve months ended March 2017, one of few office submarkets to post positive net absorption over that same time period. The submarket also boasts the second-highest gross average rental rate in of $33.99 with a 5.1% compound annual growth rate over the past 5 years. Occupancy % 100.0% 98.0% 96.0% 94.0% 92.0% 90.0% 88.0% 86.0% 84.0% 82.0% 80.0% PROPERTY SUMMARY Address: 2211 Norfolk Street,, TX, 77098 Rentable Area: Year Built: 1982 Number of Floors: 11 207,562 SF Percent Leased: 82.6% Site: ing: 2.36 acres (102,802 SF) 3.26 : 1,000 SF Historical Occupancy & Rental Rates GREENWAY SUBMARKET - 10 Year History 9.4% CAGR $40.00 $38.00 $36.00 $34.00 $32.00 $30.00 $28.00 $26.00 $24.00 $22.00 $20.00 NNN Rental Rate ($) SIGNIFICANT CAPITAL INVESTMENT The Owner invested over $3 million of non-leasing capital improvements into the subject property since 2012, maintaining its institutional quality status. Notably, the Owner invested in new tenant common areas and corridors ($300,000), new HVAC chillers and DDC controls ($650,000), elevator modernization ($775,000), new deli remodeling ($100,000), and curtain wall and building upgrades ($815,000). NON-LEASING CAPITAL INVESTED IN LAST FOUR YEARS Tenant Common Areas $1,300,000 Corridors, Restrooms, Deli, Lobby, Elevators Building Upgrades $1,100,000 Roof, Sprinklers, Curtain Wall HVAC $700,000 Chillers, DDC Controls, Fan Coils TOTAL $3,100,000 EXCELLENT MOBILITY The ingress/egress of Norfolk Tower gives its tenants easy access to all points of. Direct access to Interstate one block to the south of the building enables quick access to the CBD and George Bush Intercontinental Airport to the north. To the south Interstate connects with Loop 610 and Westpark Tollroad, providing direct access to the Galleria area, Westchase and Energy Corridor submarkets in west and Hobby Airport in southeast. On the east side of the building, Greenbriar Drive provides direct access to the prestigious campus of Rice University and surrounding neighborhoods West University and River Oaks, as well as the Texas Medical Center, the world s largest medical center. Property Overview Financial Analysis Excutive Summary Market Overview Occupancy (%) Avg. Occupancy (Past 5 Yrs) Rental Rates ($) HIGHLY DESIRABLE GREENWAY LOCATION Norfolk Tower is located in the Greenway Plaza office submarket, one of s most sought-after infill submarkets, and one of the few areas of that offers a true 24/7 live-work-play environment combined with unparalleled access and visibility along Interstate. This unique district blends the city s most exclusive neighborhoods with a large, vital business district, acclaimed retail stores, luxury hotels and condominium towers. Because of the concentration of services and amenities, the area is recognized as a primary destination center of the area. UNMATCHED SURROUNDINGS Norfolk Tower is ideally situated in between River Oaks, one of the wealthiest communities in Texas and one of the most affluent neighborhoods in the U.S., and West University, where median home sales are well over $1 million. Other high-income residential neighborhoods such as Afton Oaks, Memorial, Tanglewood and Bellaire are within 10 minutes of the Property. The Property is well-located to efficiently serve s upscale neighborhoods and highly educated workers. 1
Westcott St Kirby Dr Shepherd Shepherd Dr Dr Durham Dr Taft Taft St St Dunlavy Dunlavy St St S S Shepherd Shepherd Dr Dr Montrose Blvd Post Post Oak Oak Blvd Blvd LOCATION HIGHLIGHTS A sample of the nation s most recognized infill office submarkets and corridors is outlined below which demonstrates that the Greenway Submarket has nation leading demographics. The three mile area around Greenway has the highest median household income ($143,000) and educational attainment rate (70% holding a bachelor s degree or better) compared to other top national office submarkets. Norfolk Tower will continue to be a highly sought after office location in with demand underpinned by a prosperous, well educated, and proximate workforce DEMOGRAPHICS BY ZIP CODES (3-MILE RADIUS) City, State Submarket / Corridor Avg. Income 3-Mile Radius College Degree, TX Greenway Plaza $142,642 70% New York, NY Downtown Financial Center $131,563 61%, TX Galleria / Uptown $124,603 60% San Francisco, CA North Financial District $123,675 57% Atlanta, GA Buckhead $116,338 62% Santa Monica, CA Santa Monica $113,227 65% Beverly Hills, CA Beverly Hills $110,513 60% Chicago, IL South Wacker $107,974 65%, TX Downtown $102,430 47% Seattle, WA Downtown $98,637 58% Boston, MA Back Bay / SeaPort $95,7 60% Dallas, TX Uptown/Turtle Creek $90,999 55% MEMORIAL VILLAGES 77024 $185,967 % Memorial 77008 $140,058 65.71% Memorial Dr Pkwy Allan Washington Ave Memorial Dr W Dallas St W Gray St Waugh Dr Webster St Lamar St Louisiana St St Joseph Pkwy Clay St Texas Ave Main St Property Overview Financial Analysis Excutive Summary Market Overview TANGLEWOOD RIVER OAKS 77019 $140,196 68.82% Travis Travis St CBD San San Jacinto Jacinto St 77002 $121,137 27% Congress Ave La Branch St Dowling St McKinney St UPTOWN/ GALLERIA 77056 $133,492 72% AFTON PLACE San Felipe St 77027 $134,093 72.19% 77046 $91,606 64% AVALON PLACE Richmond Ave Westheimer Rd 77098 $123,641 73.97% W Alabama St 77006 $112,706 67.07% Richmond Ave Main Main St Elgin St McGowen St Leeland St 77003 $73,075 32% 2 BELLAIRE (7 MINUTES) Edloe St NORFOLK TOWER 77056 $224,921 76% WEST UNIVERSITY PLACE 77005 $223,263 80.12% San San Jacinto Jacinto St La Branch Branch St Almeda Rd 288 Dowling Dowling St 77004 $81,797 48.07% I Mile
EAST FACING AERIAL the bellevue Gables 21 Eleven AIG CAMPUS IH-10 The Westheimer 10 Luxury WEST FACING AERIAL Westpark Tollway WEST ALABAMA STREET Greenbriar Drive Morningside Street The Galleria NORFOLK STREET CBD The Susanne Luxury Shepherd Drive Hanover Montrose apartments RICHMOND AVENUE The Fairmont IH southwest freeway SPUR 527 MUSE dis Property Overview Financial Analysis Excutive Summary Market Overview IH-10 610 Greenway Plaza River Oaks River Oaks Baptist School West University Kirby Grove west ave Kirby Collection Windsor at west University Kirby drive IH southwest freeway RICHMOND AVENUE Luxury Gables District at Greenbriar GreenBriar drive 3
SITE PLAN Morningside Drive SOUTH FACING AERIAL The Carter Museum Tower apartments ing Garage Norfolk Drive Hermann rice university 2211 Norfolk texas medical center Greenbriar Drive Property Overview Financial Analysis Excutive Summary Market Overview The Muse Encore CC&G apartments Southampton neighborhood The Fairmont West University neighborhood IH southwest freeway district at greenbriar Shepherd Drive RICHMOND AVENUE GreenBriar Drive Luxury 4
Eas te x COUNTY ExxonMobil Corporate Headquarters HARRIS COUNTY Pr op George Bush Intercontinental Airport Greenspoint Property Overview L OC AT I O N M A P S os ed Gr Sam Pkwy Lake Financial Analysis y rw wy nt H mo au Be North The Galleria William P. Hobby Airport Pk nd Be South Frwy r ld ia Fort or Memorial Golf Course Westcott St Memorial Dr d Woo Smithers Lake Memorial Tanglewood River Oaks Country Club San Felipe St Richmond Ave Bissonnet St Fa Newcastle St West Loop RICE UNIVERSITY Kirby Dr Gulfton St Sharpstown Mall Hermann UNIV. OF TEXAS HEALTH SCIENCES CENTER Texas Medical Center Zoo Bellaire Blvd St Bellaire Blvd n M ai e nn so Bis Br ay d med ar Ala yo u St s Ba n Meyerland Plaza M ai y Rock Rd Beechnut St t ts e ra B Blvd S Bayland d oo sw ffalo Speedway Stella Link Rd HOUSTON BAPTIST UNIVERSITY in St Fann e w th u So F st ay ew re 5 Alabama St NORFOLK TOWER Westpark Dr llway Sharpstown Country Club Westheimer Rd Weslayan St Sage Rd Chimney Rock Rd Fountain View Dr Voss Rd Fondren Rd Galleria The Galleria Westpark To Harwin Dr GALVESTON COUNTY BRAZORIA COUNTY Westheimer Rd Richmond Ave Montrose River Oaks Proposed Grand Pkwy Allen Pkwy Sabine B a yo u lo Buffa Clear Lake Ave Shepherd Dr wa Country Club y Dr Ki rb rial Dr Edloe St Bu lo ffa Washington Greenbriar St em wy Fr M lf ou Armand Bayou Astrodome Holly Hall St Market Overview Voss Rd W hi t Bay eoak ou Sam Tollway Gu Bay Heights Shepherd Dr Katy Freeway W 11th St St wy Loop Post Oak Rd Campbell Rd So Pasadena Frwy in e w th u So Texas Medical Centeruth nn y rw F st San Jacinto Bay yd r llway Westpark To Blalock Rd East Loop Westheimer Rd Excutive Summary George Bush Loop NORFOLK TOWER Westchase Silber Rd Energy Corridor West Loop Katy Frwy Montrose Blvd y Heights Blvd Frw Sheldon Reservoir Road st F th we y Toll Hard rth r No No
CONTACT INFORMATION H. DAN MILLER, CCIM, SIOR Senior Managing Director T. 713.852.3576 dmiller@hfflp.com MARTIN T. HOGAN Director T. 713.852.3557 mhogan@hfflp.com WESLEY HIGHTOWER Real Estate Analyst T. 713.852.3495 whightower@hfflp.com JOHNNY KIGHT Real Estate Analyst T. 713.212.6575 jkight@hfflp.com FOR FINANCING INQUIRIES SUSAN HILL Senior Managing Director T. 713.852.3564 shill@hfflp.com HFF HOUSTON 9 Greenway Plaza, Suite 700, Texas 77046 T. (713) 852-3500 F. (713) 527-8725 hfflp.com Holliday Fenoglio Fowler, L.P., HFF Real Estate Limited (collectively, HFF ), HFF Securities L.P. and HFF Securities Limited (collectively, HFFS ) are owned by HFF, Inc. (NYSE: HF). HFF and its affiliates operate out of 24 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment sales, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. For more information please visit hfflp.com or follow HFF on Twitter @HFF.